S. Korean investors look overseas
A JUMP in tensions with North Korea has fed a tenfold surge in overseas commercial-property spending by investors south of one of the world's most-heavily-armed borders, making South Korea the largest property investor so far this year.
South Korean investors bought about US$5 billion (S$6.4 billion) in the first five months, a huge increase on the first half of last year, real-estate consultancy Jones Lang LaSalle (JLL) said.
"This allocation to commercial property over such a short period of time is unprecedented for the South Koreans," it said. "Tensions with the North Koreans have certainly aided the capital flight."
Its global buying spree, which puts it ahead of Canada and Singapore, is due to reach US$10 billion this year, JLL said.
Tensions on the Korean peninsula reached their peak in February, when North Korea threatened nuclear and missile strikes against South Korea and the United States, after the United Nations imposed sanctions on it for a nuclear-weapons test.
Aside from political tensions, a weakening South Korean won - due to Japan devaluing the yen to kick-start economic growth - has prompted South Korean investors to hold assets in foreign currencies abroad, JLL said.
The South Korean won fell as much as 1.2 per cent last Friday to 1,159.4 won to US$1, the weakest in almost a year.